DETERMINANTS OF LEVERAGE AND REGULATION: AN ANALYSIS IN DENTAL HEALTH PLAN OPERATORS

Avelar, Ewerton Alex; Souza, Antônio Artur de; Amaral, Hudson Fernandes; Orefici, Jacqueline Braga Paiva; Cailleau, Romain

doi:10.5902/1983465940116

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ARTICLE • Rev. Adm. UFSM 13 (4) • Oct-Dec 2020 • https://doi.org/10.5902/1983465940116 copy

DETERMINANTS OF LEVERAGE AND REGULATION: AN ANALYSIS IN DENTAL HEALTH PLAN OPERATORS

DETERMINANTES DO ENDIVIDAMENTO E REGULAÇÃO: UMA ANÁLISE EM OPERADORAS DE PLANOS DE SAÚDE EXCLUSIVAMENTE ODONTOLÓGICOS

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

Purpose:

This paper examines the determinants of debt levels of Brazilian dental health plan operators (OPS) under the National Supplementary Health Agency (ANS) regulation.

Design/methodology/approach:

It is an empirical article based on quantitative and causal research. The sample consisted of data from 2010 to 2018 available on the ANS website. The techniques of content analysis, descriptive statistics and panel regression were used for data analysis.

Findings:

We found that several variables related to the ANS regulation influence dental OPS debt levels. Furthermore, there are also several similarities between the two categories under analysis: dental cooperatives and group dentistry, despite the differences in the legal nature of such organizations.

Research limitations/implications:

The present study suffers from some limitations: (a) the sample investigated is restricted to OPS public data; and (b) regulation variables are limited due to the data available for calculation, despite our efforts to show otherwise.

Originality/value:

The present research offers a range of contributions to the literature on dental operators’ capital structure. Firstly, it emphasized the impact of regulation in dental operators’ financial decisions in Brazil. Moreover, it confirmed the important role of companies’ determinant variables of capital structure in explaining OPS debt levels. Lastly, the study introduced regulatory variables as determinants of OPS debt ratios.

Keywords:
Leverage determinants; Dental health plan operators; National Supplementary Health Agency (ANS); Regulation

Variable	Abbreviation	Calculation	References
General indebtedness	GI	(CL + NCL) ÷ TA	Brito, Corrar and Batistella (2007), Ceretta, Vieira, Fonseca & Trindade (2009), Correa et al. (2013), Forte, Barros and Nakamura (2013) e Avelar, Cavalcanti, Pereira & Boina (2017).
Short-term debt	STD	CL ÷ TA	Brito et al. (2007), Forte et al. (2013) e Avelar et al. (2017).
Long-term debt	LTD	NCL ÷ TA	Brito et al. (2007) e Avelar et al. (2017).
Tangibility	TAN	FA ÷ TA	Rajan and Zingales (1995), Brito et al. (2007) e Ceretta et al. (2009).
Size	OPSS	ln(TA)	Fama and French (2002), Lemmon and Zender (2010) e Forte at al. (2013).
Profitability/returns	PRO	EBIT ÷ NR	Titman and Wessels (1988), Perobelli and Fama (2002) e Pohlmann and Iudícibus (2010).
Growth	GROW	(TA_t+1 - TA_t) ÷ TA_t	Titman and Wessels (1988), Perobelli e Fama (2002), Fama and French (2005), Leal (2008), Forte et al. (2013) e Avelar et al. (2017).
Non-debt tax shield	NDTS	(DEP+AMOR) ÷ TA	Ceretta et al. (2009)
Singularity	SIN	INT ÷ TA	Titman and Wessels (1988), Perobelli and Fama (2002) e Avelar et al. (2017).
Taxation	TAX	IT ÷ NR	Pohlmann and Iudícibus (2010)
Risk	RIS	CA ÷ CL	Leal (2008) e Ceretta et al. (2009).

Competence	Number of beneficiaries
Competence	Medical assistance with or without dentistry	Exclusively dental
2000	31.161.481	2.603.001
2001	31.727.080	3.062.681
2002	31.513.309	3.677.782
2003	32.074.667	4.325.568
2004	33.840.716	5.312.915
2005	35.441.349	6.204.404
2006	37.248.388	7.349.643
2007	39.316.313	9.164.386
2008	41.468.019	11.061.362
2009	42.561.398	13.253.744
2010	44.937.350	14.514.074
2011	46.025.814	16.669.935
2012	47.814.411	18.525.537
2013	49.435.589	19.569.252
2014	50.409.378	20.325.917
2015	49.259.250	21.162.599
2016	47.740.783	21.970.649

Region	Description
1	OPS that operate throughout the national territory or in groups of at least three states among the following: São Paulo, Rio de Janeiro, Minas Gerais, Rio Grande do Sul, Paraná and Bahia.
2	OPS operating in the State of São Paulo or in more than one state, with the exception of the groups defined in the criterion of Region 1.
3	OPS that operate in a single state, whatever it may be, except in the State of São Paulo.
4	OPS that operate in the Municipality of São Paulo, Rio de Janeiro, Belo Horizonte, Porto Alegre, Curitiba or Brasília.
5	OPS that operate in a group of municipalities, except those defined in Region 4.
6	OPS that operate in a single municipality, except those defined in Region 4.

Hip	Variable	Abbreviation	Calculation	References
1	Proportion of antique contracts	ANT	OPB ÷ TOB	ANS (2018b)
2	Average age of beneficiaries	AAB		ANS (2016)
3	% of beneficiaries of collective plans	COL	BCOL ÷ (BCOL + BIP)	Adapted from ANS (2016)
4	OPS size	OPSS	Ln(Asset)	Baldassare (2014) and ANS (2011)
5	OPS action region	ARC	If the operator operates in a given region (1 to 5), 1; if not, 0. (Dummy variable)	ANS (2009)
6	SHPI	SHPI	Value from 0 to 1.	ANS (2016)
7	Fiscal direction	FD	If the operator had already passed the ANS tax management regime, 0; If not, 1. (Dummy variable)	Law of Access to Information (LAI)
8	ANS Registration	ANSR	If the operator was registered before the creation of ANS, 0; If not, 1. (Dummy variable)	LAI
9	Dependency reason	DEP	U15O60 ÷ A15U60	ANS (2016)

OPS Modalities	2010	2011	2012	2013	2014	2015	2016	2017	2018	Total
Dental cooperative	93	95	94	95	101	99	96	29	28	730
Group Dentistry	76	63	67	70	83	81	79	40	38	597
Total	169	158	161	165	184	180	175	69	66	1327

Variable Y	BL		STD		LTD
Equation	1		2		3
Model	FEM			FEM		FEM
Variable	Coefficient	P-value	Coefficient	P-value	Coefficient	P-value
RIS	-0,08	0,00***	-0,13	0,00***	0,05	0,00***
PRO	-0,35	0,00***	0,12	0,14	-0,47	0,00***
TAN	-0,32	0,00***	-0,39	0,00***	0,07	0,11
SIN	0,02	0,93	-0,35	0,31	0,37	0,03**
OPSS	-0,02	0,05*	0,03	0,23	-0,05	0,00***
GROW	0,02	0,47	-0,07	0,00***	0,08	0,02**
TAX	-1,41	0,01**	0,08	0,84	-1,50	0,06*
NDTS	0,53	0,11	-0,64	0,13	0,11	0,70
ANSR	-0,09	0,00***	0,05	0,16	-0,05	0,04**
ARC1
ARC2
ARC3	-0,05	0,01**	0,01	0,55	-0,06	0,02**
ARC4	-0,06	0,01**	0,03	0,15	-0,09	0,00***
ARC5	-0,01	0,71	0,01	0,51	0,00	0,71
FD	-0,18	0,00***	0,44	0,00***	-0,62	0,00***
AAB
SHPI	-0,01	0,62	0,00	0,89	-0,01	0,44
COL	0,07	0,03**	-0,00	0,96	0,07	0,00***
ANT	0,16	0,00***	0,05	0,27	0,11	0,00***
DEP	0,09	0,11	0,07	0,37	0,02	0,75
	Within Adj. R²	22,1%	Within Adj. R²	52%	Within Adj. R²	8,6%
	F-test	20,04^***	F-test	54,22^***	F-test	11,90^***
	Anderson-Darling	10,31^***	Anderson-Darling	10,64^***	Anderson-Darling	10,2^***
	Breusch-Pagan	71,1^***	Breusch-Pagan	95,5^***	Breusch-Pagan	103.8^***
	Durbin-Watson	1,66^***	Durbin-Watson	1,68^***	Durbin-Watson	1,49^***

Variable Y	BL		STD		LTD
Equation	1		2		3
Model	REM		FEM		REM
Variable	Coefficient	P-value	Coefficient	P-value	Coefficient	P-value
(Intercept)	0,75	0,00***			-0,22	0,04**
RIS	-0,15	0,00***	-0,15	0,00***	0,00	0,63
PRO	-0,29	0,00***	-0,10	0,27	-0,13	0,07*
TAN	-0,30	0,00***	-0,44	0,00***	0,13	0,02**
SIN	-0,38	0,02**	-0,59	0,00***	0,22	0,09*
OPSS	0,01	0,16	-0,02	0,40	0,02	0,00***
GROW	-0,03	0,32	0,01	0,57	-0,03	0,15
TAX	0,05	0,81	0,08	0,78	-0,04	0,89
NDTS	0,20	0,54	-0,11	0,79	0,41	0,28
ANSR	0,03	0,26	-0,08	0,05**	0,00	0,96
ARC1	-0,13	0,04**	0,02	0,56	-0,15	0,00***
ARC2	0,02	0,85	0,02	0,57	0,01	0,86
ARC3	-0,14	0,02**	-0,08	0,25	-0,09	0,07*
ARC4	0,02	0,31	0,03	0,24	-0,00	0,86
ARC5	-0,05	0,01**	-0,04	0,03***	-0,01	0,45
FD	0,00	0,95	-0,13	0,00***	-0,03	0,51
AAB	-0,00	0,81	-0,00	0,25	0,00	0,40
SHPI	-0,04	0,13	-0,00	0,91	-0,01	0,56
COL	0,13	0,00***	0,13	0,03**	0,06	0,01**
ANT	0,30	0,00***	0,02	0,94	0,18	0,09*
DEP	-0,04	0,47	0,08	0,58	-0,04	0,31
	Adjusted R²	54,4%	Within Adj. R²	20,2%	Adjusted R²	6,9%
	LRT	700,2^***	F-test	16,8^***	LRT	62,16^***
	Anderson-Darling	4,17^***	Anderson-Darling	17,11^***	Anderson-Darling	11,29^***
	Breusch-Pagan	47,4^***	Breusch-Pagan	96,5^***	Breusch-Pagan	29,7^*
	Durbin-Watson	1,58^***	Durbin-Watson	1,74^***	Durbin-Watson	1,72^***

Universidade Federal de Santa Maria Avenida Roraima nº 1000, Prédio 74C, Sala 4210 - Cidade Universitária - Centro de Ciências Sociais e Humanas (CCSH) - Universidade Federal de Santa Maria (UFSM), Cep: 97105-900, Tel: +55 (55) 3220-9242 - Santa Maria - RS - Brazil
E-mail: rea@ufsm.br

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[1] 1. Ewerton Alex Avelar - Doctor in Administration from Federal University of Minas Gerais - UFMG. E-mail: ewertonalexavelar@gmail.com